The Welsh Government has a proud record of support for Credit Unions and has invested significant sums of money in the sector to provide access to fair and affordable credit. Credit Unions feature strongly in our efforts to tackle poverty and will continue to be a key partner of Welsh Government in supporting financial inclusion and wellbeing and building financial resilience.
I am providing this Written Statement to set out Welsh Government’s continued backing, with up to an additional £1million being made available during 2020/21 as credit unions support those in need during the current coronavirus crisis.
This investment has been made with the aim of ensuring that everyone in need of credit is able to access affordable financial services from credit unions. This remains our aim.
Credit unions, like many financial service providers, saw loan requests fall during lockdown, and this – whilst now beginning to return to normal levels – will have an impact on their income. The Welsh Government’s previous capital loan fund was well received and we are therefore providing up to a further £1million of much needed capital to credit unions. The Credit Union Capital Loan Fund will receive applications during a fixed window, making allocations at the end of this calendar year.
Credit unions provide an excellent and ethical way for people to save regularly and borrow affordably and responsibly. During the coronavirus lockdown they made significant efforts to maintain essential services for existing customers and also new members looking to borrow affordably. I am pleased that as restrictions start to ease, for those credit unions that had to reduce their opening hours, they have now begun to re-open branches and increase the range of services available. This access will be important as people look to try and reset their finances.
Now more than ever, members will be looking to their trusted credit unions to provide assistance to navigate the unprecedented times that lie ahead. Over the past six months credit unions have shown their resilience and continue to be there for anyone in need of affordable credit. I thank them for this.
Over recent years credit unions have worked to attract new members, boosted by national marketing and aided by a national brand, Credit Unions of Wales, which has helped to unite them and raise awareness of who they are, where they are and what they do. They have established themselves as the leading ethical savings and loans providers with the widest reach in Wales.
Over the past year, fifteen new collection points and branches across Wales have been opened, with the latest one most recently in Carmarthen, with digital services expanded to offer greater online access, as well as expanding the reach of their financial education programmes in schools.
Credit Unions have also made significant efforts to increase payroll partnerships. Many employers across Wales are taking advantage of this, encouraging staff to save regularly and borrow affordably, supporting financial wellbeing. I want to see these relationships continue to flourish – the Coronavirus pandemic has highlighted more than ever the need for savings buffers, putting a small amount away regularly where possible for a rainy day.
Credit Unions have a determination to strengthen and grow, aided by a renewed strategy developed by the sector, due to be published shortly.
I am pleased to be able to provide this additional funding so that we continue to have a strong Welsh Credit Union movement, providing access to fair, responsible, ethical and affordable credit across Wales.
This statement is being issued during recess in order to keep members informed. Should members wish me to make a further statement or to answer questions on this when the Senedd returns I would be happy to do so.